UBN Diversification Earns It a Stupendous Growth in Post Tax Profit

Union Bank of Nigeria (UBN) grew its pre-tax profit by a mere 31 percent, but was able to grow its post tax profit by a whopping 217 percent after a profitable diversification.
The bank yesterday reported an increase of 217 percent in profit after tax (PAT) for the year ended December 31, 2013.
Profit before tax grew by 31 per cent from N2.9 billion in 2012 to N3.8 billion, while PAT soared by 217 per cent from N1.2 billion to N3.8 billion.
An analysis of the bank’s balance sheet showed that gross loans and advances to customers rose by 30 per cent from N192 billion to N249 billion, while shareholders’ funds grew from N173 billion to N192 billion.
UBN recorded gross earnings of N121 billion, up marginally by four per cent from N117 billion in 2012.
Capital adequacy ratio stood at 25 per cent, just as non-performing loan ratio stood at 5.8 per cent down from 17.3 per cent in 2012. UBN ended the year with a liquidity ratio of 76 per cent, compared with 30 per cent Central Bank of Nigeria (CBN) statutory minimum requirement). Earnings per share was 32 kobo.
The Group Managing Director and Chief Executive of Union Bank, Emeka Emuwa said the bank pushed forward on a number of critical internal and external restructuring initiatives, in respect of which they were charged approximately N11 billion.
“I am pleased to report that, notwithstanding these significant exceptional costs, Union Bank remained profitable. This signals to us that our transformation programme put the Bank on the right trajectory,” he said.
Also commenting on the results, Executive Director and Chief Financial Officer of Union Bank, Oyinkan Adewale said, “In 2013, we focused on improving our efficiency as a bank. We identified key areas where we could rationalise and optimise cost and we launched several initiatives. In the coming years, we expect these initiatives to translate into significant gains for the Bank.
She noted that in addition, by divesting profitably from its non-bank subsidiaries, UBN significantly improve its capital adequacy ratio and the Group’s risk profile, while focusing on our core banking business.
“Having cleaned up the legacy risk assets portfolio, we expect significantly reduced impairment going forward,” Adewale said.

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